OCR 502 – Introduction to Invoice Capture in D365 Finance

Introduction

Invoice capture in Dynamics 365 Finance is transforming how businesses manage their financial processes. It automates the extraction of data from vendor invoices, reducing manual effort, improving accuracy, and speeding up payment cycles. With integrated Optical Character Recognition (OCR) technology, it allows users to capture invoices from scanned images, PDFs, or emails, and directly input data into D365 Finance, eliminating the need for time-consuming manual entry.

The Past of Invoice Capture

Historically, invoice capture was a manual process. Invoices were received as paper documents or basic PDFs, requiring Finance teams to manually key in data, match purchase orders, and manage approvals. This manual handling not only delayed payments but also increased the chances of errors and inconsistencies, especially for large organizations handling thousands of invoices.

In the absence of native invoice capture functionality, many organizations turned to third-party solutions or Independent Software Vendors (ISVs) to automate this critical part of their procure-to-pay process. These solutions provided OCR, automation, and workflow capabilities that integrated with D365 Finance, but often came with additional licensing costs, complex integrations, and maintenance overheads.

Capabilities of Invoice Capture in D365 Finance

The invoice capture functionality in D365 Finance leverages OCR and automation to:

• Extract invoice data automatically, minimizing human errors.
• Match invoices with existing purchase orders for seamless validation.
• Integrate workflows to route invoices for approval based on predefined rules.
• Handle high volumes of invoices efficiently and accurately, whether PO-based or non-PO invoices.

This built-in solution allows companies to streamline their processes without relying on third-party tools, making financial operations more efficient, cost-effective, and secure.

Microsoft’s Vision and Impact on ISVs

Microsoft’s introduction of native invoice capture is part of a larger strategy to bridge the gaps in financial automation. By embedding invoice capture within D365 Finance, Microsoft aims to provide customers with an all-in-one solution, reducing the need for third-party applications.

As Microsoft continues to expand the capabilities of invoice capture, it will inevitably impact the market for external ISVs that traditionally offered these services. While third-party solutions still offer ISV customizations and integrations that may appeal to some enterprises, the growing capabilities of D365 Finance’s native tools will likely lead to reduced dependency on external vendors. This shift will make financial automation more accessible and cost-effective for businesses of all sizes.

The Future of Invoice Capture with Microsoft

Looking ahead, Microsoft plans to further enhance invoice capture with ISV AI and machine learning capabilities. Future updates will likely include more intuitive data extraction, predictive analytics for identifying anomalies, and even deeper integration with tools like Power Automate for customizable workflows.

This means businesses can look forward to a more seamless, intelligent, and cost-efficient invoice capture process within D365 Finance, fully integrated into the Microsoft ecosystem.

Stay tuned for the next article in this series, where we’ll explore how to set up and optimize invoice capture in D365 Finance!

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